SoftBank restarts buybacks as asset sales swell cash pile

FILE PHOTO: The logo of SoftBank Group Corp is displayed at SoftBank World 2017 conference in Tokyo, Japan, July 20, 2017. REUTERS/Issei Kato

SoftBank Group Corp 9984.T resumed its share buybacks in September, after an enforced pause in August due to asset sales, saying on Wednesday it spent 40 billion yen ($380 million) of its growing cash pile.

This is in line with previous signalling of a slower pace of purchases from SoftBank, which spent 1 trillion yen on buybacks between March and early August after the gap between the value of its assets and market valuation reached record levels.

SoftBank’s shares traded sideways during the lull in August ahead of deal news, which included the sale of chip designer Arm to Nvidia Corp NVDA.O, but have since resumed their climb and closed near two decade highs on Wednesday.

In a sign of SoftBank’s restored confidence, its Vision Fund plans to market a blank-check company to investors, a source told us, as it joins a trend to offer private companies a quick route to public markets.

The size of the company has not been decided, the source said, but could include SoftBank cash. In July 2019 SoftBank said it had secured $108 billion in pledges for a successor to its $100 billion Vision Fund, before a string of soured bets undermined fundraising efforts.

A recovery at the first fund, which analysts say could trigger a broader reappraisal of the group’s investing abilities, has yet to be seen, with its assets still underwater at the end of June.

Mitsunobu Tsuruo, a Citigroup analyst, forecasts SoftBank’s earnings “at roughly breakeven” for the year ended March, while cautioning that it is “exceptionally hard for people outside the firm to establish a rational outlook for earnings”.

Citigroup estimates SoftBank’s asset sales have topped 9 trillion yen ($85 billion) in the last six months.

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